UK frozen food giant Iceland has revealed that it will be revising the future role of price promotions, BOGOFs (buy one get one free) and meal deals within its retail outlets.
Speaking at an Institute of Grocery Distribution (IGD) trade briefing in London yesterday [Tuesday], Iceland buying director Karl Martin explained that it was essential that the group readdress the balance with regard to the amount of sales driven by deals.
Iceland is renowned for its “feel the deal” approach to generating sales. BOGOF promotions are regularly rotated, and popular “meal deals” offer all the key components of a Sunday roast, for example, at a discounted price. But now over 45% of turnover is generated in this way.
Sara Jamison, Iceland’s marketing director, added that the store itself is responsible for driving consumers to pick out and rely upon such deals, having let pricing get out of line while the group struggled with the poor implementation of an organic strategy last year.
Such a position is largely unsustainable however and Martin explained, “we are investing too much margin” in these kinds of offers. The ideal would be to reduce the figure to have around 35-40% of sales driven by promotions.
Martin added that the group would be “building a structure and framework around a hierarchy of promotional activity in the store”, and that Iceland’s suppliers would be playing an important role in developing that strategy.